Might Polestar be heading to Mexico?

Gothenburg-headquartered Polestar plans to announce an additional automaking plant to build its China-made Polestar 4 SUV from mid-2025. And the initial clues point to Mexico as a possible location.

The first Polestar 4s are due to start rolling off the production line at the SEA factory of its major shareholder, China’s Geely, in Hangzhou Bay from as early as next week, but more is to follow. “We will soon announce another production site outside of China and plan to start producing Polestar4s there in mid-2025,” says Polestar CFO Johan Malmqvist.

The main driver of the move is to avoid US import duties — “given the current China-centric manufacturing footprint, which leads to high levels of tariffs into the US”, Malmqvist continues. “In the US, our objective is to improve the profitability of that market.

“This will in part be addressed by the production of Polestar 3 in Charleston, and even further from mid-2025 with a new manufacturing plant for Polestar 4 outside of China, which we will announce soon.”

And while Polestar is not offering specifics, it does reveal that the new plant will located somewhere that “enjoys more favourable trade agreement terms with the US”. That would certainly include Mexico, which can also boast significant advantages in terms of distance and boasting an existing footprint of relatively inexpensive automaking experience over any other possible contenders.

Mexico is also keen to secure a manufacturing base for EVs and the EV supply chain, offering federal and state incentives.

Export to Europe

Another North American plant for Polestar 4 would also mesh well with the strategy the firm’s CEO Thomas Ingenlath outlines for US-made Polestar 3s going into Europe. And it could also serve to dampen any concerns about potential geopolitical risks from being a firm with both significant Chinese ownership and Chinese-made vehicles.

“We had to make an effort to diversify our manufacturing footprint,” Ingenlath says. “We have started with Polestar 3 being now implemented into the US plant in South Carolina — where we will produce this car not only for the US, but we will, as well, export from the US to Europe.

“That certainly is a way of us de-risking our business. The other way is that —for our second important SUV that we will now introduce the Polestar 4 — we will very soon be quite precise about how we found a way of having a second production footprint for this car as well,” he continues.

Ingenlath maintains, though, that having Chinese-made vehicles in the meantime should not be a political issue. “We are buying our cars from our contract manufacturing partners; that is a very straightforward purchase, on an arm's length basis,” he says.